Many of you are familiar with Aetna’s denial based on CMS rule 2202.6. Here”s a recent response Medlinks provided to one of our clients. ABC Hospital Health System bills according to CMS guidelines and rules with no delineation between payers, either government or commercial. There is no special circumstance billing done that accommodate one payer to another.
In the Aetna cases where reimbursement is at contention there are a couple of primary arguments used by Aetna to support their “sweeping” denial of charges. The first of these is CMS rule 2202.6.
PRM-1 §2202.6 Routine Services.–Inpatient routine services in a hospital or skilled nursing facility generally are those services included in by the provider in a daily service charge–sometimes referred to as the “room and board” charge. Routine services are composed of two board components; (l) general routine services, and (2) special care units (SCU’s), including coronary care units (CCU’s) and Intensive Care Units (ICU’s). Included in routine services are the regular room, dietary and nursing services, minor medical and surgical supplies, medical social services, psychiatric social services, and the use of certain equipment and facilities for which a separate charge is not customarily made.
As with many of CMS rules the final determination of the rule is open for interpretation and in this rule we’ve highlighted the key adjective here, which is “minor”. In Aetna’s case, the word “minor” includes every supply item on a bill and the denials clearly show that the “training at Aetna for denials is based on a sweep of the revenue center 270 and its sub categories.” To include all supplies, both surgical (when these are often used in an OR and/or procedure room setting) and medical is a gross misinterpretation of the word “minor” and the intention of the rule. Minor means minor like band aids, small dressings, personal items, and such. To even include IV supplies is incorrect in that it infers that all patients routinely receive IV’s which is not the case. While Aetna has the right to interpret the rule, ABC Hospital further has the right to interpret the rule and it is our strong contention that this sweeping interpretation by Aetna is a cost saving measure rather than an objective look at the rule.
In his letter posted online at http://checkfrs.com/pdf/7.pdf Herb Kuhn, Director Center for Medicare Management responding to a similar issue says the following:
“Medicare does not dictate a provider’s charge structure or how it itemizes charges but does determine whether charges are acceptable for Medicare purposes. A hospital’s fiscal intermediary is the first recourse to discuss specific issues of routinely furnished items and services versus separate charges for additional items and services, both for inpatient general routine room and board services and for services in ancillary departments. However, for ancillary departments, section 2202.8 does not specifically address which items or services are part of the basic “routine” charge and which are charged in addition to the basic charge. Therefore, we do not see an issue in your examples of a hospitals having a basic ancillary department charge for the room with additional charges for other items and services furnished to patients depending upon the procedure, as long as the various charges are reasonably and consistently related to the cost of the services to which they apply and are uniformly applied”.
ABC Hospital has and does apply charges uniformly and consistently related to the cost of the services, and the supplies needed to deliver those services. There is no delineation between Medicare and Aetna in the delivery of services and supplies and how those items are billed.
Further weigh in from experts on the subject at http://www.hcpro.com/content/276423.pdf state the following:
Determine what’s in the room rate
“So how should a facility’s staff initiate the discussion about what to bill separately? Start by determining and defining what’s included in the room rate, Williams says. Generally, the room rate includes:
➤ Housekeeping and maintenance services
➤ Trash and biohazard disposal
➤ Administrative services”
The article goes on to state:
What CMS actually says about billing ancillary procedures
“When considering what guidance CMS provides regarding billing ancillary procedures, hospitals must understand how CMS defines charges. In §2202.4 of the Provider Reimbursement Manual, CMS states: Charges refer to the regular rates established by the provider for services rendered to both beneficiaries and to other paying patients. Charges should be related consistently to the cost of the services and uniformly applied to all patients whether inpatient or outpatient. All patients’ charges used in the development of apportionment ratios should be recorded at the gross value; i.e., charges before the application of allowances and discounts deductions. CMS makes it clear in §2203 that although it cannot dictate a facility’s charges or charge structure, it can determine whether the charges are allowable for use in apportioning costs, says Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc., in Danvers, MA. Apportioning refers to how a facility allocates costs between Medicare and nonMedicare patients. Apportioning can be traced back to when CMS reimbursed hospitals based on costs, Hoy says. Even though this is no longer the case, CMS still relies on this guidance to build rates, among other things. “So they are still concerned about what costs are appropriate to Medicare and what costs are appropriate to other payers,” Hoy says. To qualify for apportioning, facilities should establish a charge structure and apply it uniformly to all patients. The charge structure should be reasonably and consistently related to the costs of the services, Hoy says. “If you have a cost for a service, it should be represented in some reasonable and consistent way somewhere on your claim.” A facility must follow the same method of charge setting regardless of the setting in which the services take place (e.g., inpatient, outpatient, distinct part units, or skilled nursing facility). A facility must also follow that charging practice for Medicare and nonMedicare patients. The consistent application is what makes the costs apportion able, which is the ultimate goal, Hoy says. In some instances, facilities may choose to incorporate the cost as part of a routine rate and consider other costs as ancillary. Either way, those charges should relate to costs. If a payer denies the charges, it is not allowing certain costs, Hoy says. As a result, facilities will have an imbalance between costs and charges. That’s because the payer has taken away the charge even though the facility still incurs the costs”
Anesthesia Supplies and Gases
As with the above ruling Anesthesia and its delivery remain complex and different with every case. To even float the argument that gases are part of the anesthesia charge as a whole removes the very separate nature of the use of the room by the surgeon versus the use of the room by the anesthesiologist. There just is no comparison, the delivery of meds, gases, and the use of certain supplies are rarely standard fair. Once again the charge for the service includes:
➤Housekeeping and maintenance services
➤ Trash and biohazard disposal
➤ Administrative services
Separate from this are the services and supplies as they differ from case to case, patient to patient and practitioner to practitioner. Payers, providers, and auditors understand that no two cases, even when the procedure title is the same are handled in exactly the same way. This is especially true for the highly specialized field of anesthesia.
This classic example of MedCheck Select and its summary of adjusted charges is a classic example of an indiscriminate sweep of several revenue centers based on a gross misinterpretation of CMS rules. This business decision by Aetna to sweep these categories includes highly specialized meds, services, and supplies none of which is “routine” but in fact special to this case. In this sweep Aetna has further ignored CMS’ ruling on ED hydration and injection and has further swept these legitimate charges under the argument of nursing services which CMS has clearly defined as incorrect. It should be noted that this and every other review was done with the bill only without the proper channels of longstanding industry accepted standards of auditing which includes eyes on the medical records.
Again a sweep of revenue centers implying that these meds, supplies, and other items are “routine” inferring every admission receives these items. Again this is a specialized case with a relatively ill patient receiving specialized care. As a standout item here they’ve swept the handling charge for sending labs out to specialized labs. This charge is not banned, not routine, and does incur added cost to the care of your and our patient. It should be noted that this and every other review was done with the bill only without the proper channels of longstanding industry accepted standards of auditing which includes eyes on the medical records.
Same exact issue here, a mass sweep of IV fluids and supplies. Is it Aetna contention that all IVs are the same? No two patients, except by coincidence ever receive the same IV supplies, fluids, and usage. This is all a medical decision carefully calculated and ordered by a physician for the individual case and its needs. As a standout item here, the specialized mattress meant to protect against bed sores is not routine but a specialized ordered item. It should be noted that this and every other review was done with the bill only without the proper channels of longstanding industry accepted standards of auditing which includes eyes on the medical records.
Same issue here, a sweep of all supplies, fluids (which are ordered meds), and such. As a standout item here is the charge for intubation. Does Aetna contend that intubation is routine? Is this a regular procedure done to every patient including every OR patient because many, many patients are not intubated but done so under specialized circumstances surrounding by highly trained individuals. It should be noted that this and every other review was done with the bill only without the proper channels of longstanding industry accepted standards of auditing which includes eyes on the medical records.
Same issues here, just a business decision policy to scrub the bill and indiscriminately sweep revenue centers. A violation of industry standard auditing practices where a fair assessment of charges versus documentation allows both parties the opportunity to defend the bill.
Same as the rest. Standout item here is that once again Aetna has ignored the CMS rule allowing IV Hydration and injections. These again are never routine, CMS has clearly allowed the charge and this makes for a classic example of misinterpreting the rule as a business decision. It should be noted that this and every other review was done with the bill only without the proper channels of longstanding industry accepted standards of auditing which includes eyes on the medical records.
This case and its exclusions are surprising. First the procedures done are among medicines very highly specialized cath lab procedures which are never routine and likely saved your customers life. In your synopsis you have a coronary arthrectomy listed under supplies. This is a highly specialized far from routine procedure and shows a gross error of understanding or a business sweep without real regard to the reality of the hospitals position. It should be noted that this and every other review was done with the bill only without the proper channels of longstanding industry accepted standards of auditing which includes eyes on the medical records.